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CACI Strengthens Position in the Industry with New Contract

Information Technology Enterprise Solutions – 2 Services (ITES-2S), a contract vehicle under CACI International Inc. (CACI - Free Report) , was recently awarded a contract by the Space and Naval Warfare (SPAWAR) Systems Center Atlantic to offer travel call center support services to the Department of Defense (DoD). This three-year seven-month contract is worth $26 million. This deal will strengthen the company’s foothold in the Business Systems market.

Per the contract, the company will provide complete Defense Travel System (DTS) application support. The prime focus will be on delivering customer service for DoD personnel traveling across the globe.

DTS is a fully integrated, automated, end-to-end travel management application, which is used by DoD personnel across all its agencies.

CACI has a rich history of working with the DoD agencies. The company’s knowledge of defense travel policies and procedures will enable it to provide high-quality service support to the DTS. The company’s experience in this field will help in productivity gains, time and cost savings. CACI has improved key performance metrics, and productivity, along with increasing customer satisfaction for SPAWAR System Center Atlantic’s Defense Travel System call center with its repeatable processes, continuous improvements, and quality management system.

A leader in IT outsourcing for the U.S. federal government, CACI earns its revenues through four customer groups: the DoD, Federal Civilian Agencies, Commercial and Other, and State and Local Governments. The company’s DoD customers include the U.S. Army (the largest customer) and the Navy. Meanwhile, federal civilian agencies provide litigation support services to the Department of Justice.

Having the government as one of the biggest clients lends stability to the business and mitigates some of the fluctuations in revenue. Although the government generally has a lengthy approval process, the project continues to earn money years after approval. Moreover, government contracts improve the visibility on future revenue streams.

In addition, CACI has ample exposure to the rapidly growing DoD and Department of Homeland Security budgets. The company’s system integration skills and intelligence expertise allow it to consume a significant portion of the funds earmarked for the Department of Homeland Security, while creating systems that foster the sharing of critical information among all intelligence agencies. Given all these factors, we believe that CACI is comfortably positioned, especially with its favored relationship with the DoD.

Accenture has a long-term earnings growth expectation of 10.2% and is currently trading at a forward P/E of 20.2x.

LogMeIn has a long-term earnings growth expectation of 22.5% and is currently trading at a forward P/E of 105.1x.

Carbonite has a long-term earnings growth expectation of 30.0% and is currently trading at a forward P/E of 88.9x.

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